Apress.Beginning.Excel.What.If.Data.Analysis.Tools.Dec

Beginning Excel What-If
Data Analysis Tools
Getting Started with Goal Seek,
Data Tables, Scenarios, and Solver

Paul Cornell

Beginning Excel What-If Data Analysis Tools: Getting Started with Goal Seek, Data Tables, Scenarios,
and Solver
Copyright © 2006 by Paul Cornell
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Contents at a Glance
Preface . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . xi
About the Author . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . xiii
About the Technical Reviewer. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . xv
Acknowledgments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . xvii
Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . xix

■CHAPTER 1
■CHAPTER 2
■CHAPTER 3
■CHAPTER 4
■CHAPTER 5
■APPENDIX A
■APPENDIX B
■APPENDIX C
■APPENDIX D

Goal Seek . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1

Data Tables . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
Scenarios . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
Solver . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59
Case Study: Using Excel What-If Tools . . . . . . . . . . . . . . . . . . . . . . . . . 109
Excel What-If Tools Quick Start . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 131
Summary of Other Helpful Excel Data Analysis Tools . . . . . . . . . . . 139
Summary of Common Excel Data Analysis Functions . . . . . . . . . . . 149
Additional Excel Data Analysis Resources . . . . . . . . . . . . . . . . . . . . . 155

■INDEX . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 157

iii

Contents
Preface . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . xi
About the Author . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . xiii
About the Technical Reviewer. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . xv
Acknowledgments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . xvii
Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . xix

■CHAPTER 1

Goal Seek . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
What Is Goal Seeking? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
When Would I Use Goal Seek?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
How Do I Use Goal Seek? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Try It: Use Goal Seek to Solve Simple Math Problems . . . . . . . . . . . . . . . . . 4
Speed, Time, and Distance Math Problems . . . . . . . . . . . . . . . . . . . . . . 4
Circle Radius, Diameter, Circumference,
and Area Math Problems . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Algebraic Equation Math Problem. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Try It: Use Goal Seek to Forecast Interest Rates. . . . . . . . . . . . . . . . . . . . . . . 9
Home Mortgage Interest Rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Car Loan Interest Rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Savings Account Interest Rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
Try It: Use Goal Seek to Determine Optimal Ticket Prices . . . . . . . . . . . . . 14
Number of Tickets Sold . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
Ticket Prices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
Troubleshooting Goal Seek . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19

■CHAPTER 2

Data Tables . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
What Are Data Tables? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
When Would I Use Data Tables? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
How Do I Create Data Tables? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
Working with One-Variable Data Tables . . . . . . . . . . . . . . . . . . . . . . . . 24
Working with Two-Variable Data Tables . . . . . . . . . . . . . . . . . . . . . . . . 26
Clearing Data Tables . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
Converting Data Tables . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
Adjusting Data Table Calculation Options . . . . . . . . . . . . . . . . . . . . . . 28

v

vi

■CONTENTS

Try It: Use Data Tables to Forecast Savings Account Details . . . . . . . . . . . 28

One-Variable Data Table to Forecast Savings Account Details. . . . . 29
Two-Variable Data Table to Forecast Savings Account Details. . . . . 30
Try It: Use Data Tables to Determine Royalty Payments . . . . . . . . . . . . . . . 31
One-Variable Data Table to Determine Royalty Payments . . . . . . . . 32
Two-Variable Data Table to Determine Royalty Payments . . . . . . . . 33
Try It: Use Data Tables to Calculate Stock Dividend Payments . . . . . . . . . 35
One-Variable Data Table to Calculate Stock Dividend Payments . . . 35
Two-Variable Data Table to Calculate Stock Dividend Payments . . . 36
Troubleshooting Data Tables . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38

■CHAPTER 3

Scenarios . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
What Are Scenarios? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
When Would I Use Scenarios? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
How Do I Use Scenarios? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
Creating a New Scenario . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
Displaying a Scenario . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
Editing an Existing Scenario. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44

Deleting a Scenario . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
Creating a Scenario Summary Report . . . . . . . . . . . . . . . . . . . . . . . . . 44
Merging Scenarios from Another Worksheet. . . . . . . . . . . . . . . . . . . . 45
Preventing Changes to a Scenario . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
Try It: Use Scenarios to Forecast Development Costs . . . . . . . . . . . . . . . . . 48
Worst-Case Scenario . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
Best-Case Scenario . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
Scenario Results . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50
Try It: Use Scenarios to Forecast Sales . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51
Summer Scenario . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
Winter Scenario . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
Scenario Results . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53
Try It: Use Scenarios to Forecast Rental Volumes . . . . . . . . . . . . . . . . . . . . 54
Blockbuster Week Scenario . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54
Regular Week Scenario . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55
Scenario Results . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56
Troubleshooting Scenarios . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57
Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58

■CONTENTS

■CHAPTER 4

Solver . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59
What Is Solver? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59
When Would I Use Solver? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60
How Do I Use Solver? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61
Installing Solver . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 63
Setting Solver Parameters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 63
Adding and Changing Constraints . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 65
Setting Solver Options. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 66
Saving and Loading Solver Models . . . . . . . . . . . . . . . . . . . . . . . . . . . . 69
Working with the Solver Results . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 71
Working with the Show Trial Solution Dialog Box . . . . . . . . . . . . . . . . 73
Creating Solver Reports . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 73
Try It: Use Solver to Solve Math Problems. . . . . . . . . . . . . . . . . . . . . . . . . . . 77
Cube Volume Problem . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 77
Object Velocity Problem . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 78
Try It: Use Solver to Forecast Auction Prices . . . . . . . . . . . . . . . . . . . . . . . . . 79
Average Daily Bid Increase for One Item . . . . . . . . . . . . . . . . . . . . . . . 80

Average Daily Auction Bid Increase for All Items . . . . . . . . . . . . . . . . 81
Try It: Use Solver to Determine a Home Sales Price . . . . . . . . . . . . . . . . . . 83
Try It: Use Solver to Forecast the Weather. . . . . . . . . . . . . . . . . . . . . . . . . . . 85
Minimum Yearly Precipitation Total for Seattle . . . . . . . . . . . . . . . . . . 86
Average December Precipitation Total for All Cities . . . . . . . . . . . . . . 87
Try It: Experiment with the Default Solver Samples. . . . . . . . . . . . . . . . . . . 89
Quick Tour . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 89
Product Mix . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 91
Shipping Routes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 92
Staff Scheduling . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 94
Maximizing Income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 96
Portfolio of Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 99
Engineering Design . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 100
Troubleshooting Solver . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 102
General Excel Error Messages . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 102
Solver Dialog Box Error Messages . . . . . . . . . . . . . . . . . . . . . . . . . . . 103
General Troubleshooting Tips . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 107
Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 107

vii

viii

■CONTENTS

■CHAPTER 5

Case Study: Using Excel What-If Tools . . . . . . . . . . . . . . . . . . . 109
About the Ridge Running Cooperative . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 109
Use Goal Seek to Forecast Membership Dues . . . . . . . . . . . . . . . . . . . . . . 110
New Lifetime Family Club Membership Dues . . . . . . . . . . . . . . . . . . 111
New Annual Family Club Memberships . . . . . . . . . . . . . . . . . . . . . . . 112
Use Data Tables to Forecast Race Paces . . . . . . . . . . . . . . . . . . . . . . . . . . . 113
Time for a Single Race Pace . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 113
Time for Multiple Race Paces . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 114
Use Scenarios to Forecast Race-Day Cash Flow . . . . . . . . . . . . . . . . . . . . 116
Cash Flow for a Rainy Weather Race Day . . . . . . . . . . . . . . . . . . . . . 118
Cash Flow for a Normal Weather Race Day. . . . . . . . . . . . . . . . . . . . 119
Cash Flow for a Perfect Weather Race Day . . . . . . . . . . . . . . . . . . . . 120
Report to Display Race-Day Cash-Flow Forecasts

Side by Side . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 121
Report to Display Race-Day Cash-Flow Forecasts in
PivotTable Format . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 122
Use Solver to Forecast Race-Day Finish Times . . . . . . . . . . . . . . . . . . . . . 123
Race-Day Finish Times with Distance and Target Pace . . . . . . . . . 125
Race-Day Finish Times with Distance and Elapsed Time . . . . . . . . 126
Race-Day Finish Times with a Pacer . . . . . . . . . . . . . . . . . . . . . . . . . 127
Use Solver to Pair Up Race Relay Teams . . . . . . . . . . . . . . . . . . . . . . . . . . . 128
Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 130

■APPENDIX A

Excel What-If Tools Quick Start . . . . . . . . . . . . . . . . . . . . . . . . . . . 131
Using Goal Seek . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 131
Goal Seek Procedure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 131
Goal Seek Example . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 131
Using Data Tables . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 132
Data Table Procedure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 132
Data Table Examples . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 133
Using Scenarios . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 135
Scenario Procedure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 135
Scenario Example . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 135
Using Solver . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 136
Solver Procedure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 136
Solver Example. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 137

■CONTENTS

■APPENDIX B

Summary of Other Helpful Excel Data Analysis Tools . . . 139
Subtotaling and Outlining Data . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 139
Consolidating Data . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 140
Consolidating Using 3-D References in Formulas . . . . . . . . . . . . . . 140
Consolidating Data by Position or Category . . . . . . . . . . . . . . . . . . . 141
Sorting Data . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 142
Sorting in Ascending or Descending Order . . . . . . . . . . . . . . . . . . . . 142
Sorting by Multiple Columns . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 142
Sorting by Months or Weekdays . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 142
Sorting in Custom Order . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 143
Sorting by Rows . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 143
Filtering Data . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 144
Filtering Data with the AutoFilter Feature . . . . . . . . . . . . . . . . . . . . . 144
Filtering Data with the Advanced Filter Feature . . . . . . . . . . . . . . . . 145
Using Conditional Cell Formatting. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 146
Working with OLAP Data . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 147
Working with PivotTables and PivotCharts . . . . . . . . . . . . . . . . . . . . . . . . . 147

■APPENDIX C

Summary of Common Excel Data Analysis Functions . . . 149
Statistical Functions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 149
Mathematical Functions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 151
Financial Functions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 152

■APPENDIX D

Additional Excel Data Analysis Resources . . . . . . . . . . . . . . . 155
Books . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 155
Periodicals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 155
Web Sites . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 155
Newsgroups . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 156

■INDEX . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 157

ix

Preface
W

hen folks ask me what I do for a professional career, I usually tell them, “I write books about
computers.” For those who are computer literate, the discussion usually continues this way:
Them: “What subjects have you written about?”
Me: “Mostly about using Microsoft Excel.”
Them: “Like using Excel to do what?”
Me: “Analyze data. In fact, I’m currently working on a book that will cover analyzing data
using the Excel what-if tools.”
Them: “What-if tools?’ What are those?”
Me: “Goal Seek, data tables, scenarios, and Solver.”
Them: “Hmm . . . I’ve never heard of those. What are they?”
At this point, because I really enjoy teaching people, it’s very tempting to jump into
computer-instructor mode and bend someone’s ear for ten minutes about the Excel what-if
tools. However, I know better than to do that. I’ve learned that the best way to explain these
types of things to others is to first start by describing what kinds of problems that they were
designed to address. Using this approach, here’s a simple, brief way to describe the Excel
what-if tools:
• You use Goal Seek in Excel when you want to work backward from a solution to a
problem—when you know the result of a single worksheet formula but not the input
value that the formula needs to figure out the result. For instance, Goal Seek would be
a good way to get a rough estimate of how much you could afford to pay for a home
mortgage if you already know the mortgage’s interest rate, the mortgage term, and
how much you were willing to pay on the mortgage each month.
• Data tables are helpful when you want to view and compare the results of all of the different variations of a formula on a worksheet. A simple example of this might be one of
those multiplication tables or metric conversion tables that you learned in school.
• Scenarios are a great tool for saving, in a worksheet, sets of values that Excel can switch
between automatically so that you view different results. For instance, you could create
best-case and worst-case scenarios, and then compare these scenarios’ results next to
each other.
• You use Solver when you want to work backward from a solution to a problem. It’s similar
to Goal Seek, but you use Solver when you also want to apply restrictions on the problem.
Using the previous Goal Seek example, you could use Solver if you wanted to further
restrict the total home price to not exceed a certain price.

xi

xii

■PREFACE

This book is packed full of tutorials and exercises to help you learn about and master the
Excel what-if tools at your own pace. My hope is that you will use this book first as a tutorial
to learn about the tools, and then come back to it often as you need further help or simply a
technical refresher.
I hope you enjoy reading and using this book as much as I enjoyed writing it.
Best wishes,
Paul Cornell

About the Author
For the past six years, PAUL CORNELL has been involved in creating documentation for Microsoft Office System business solution developers.
Paul has contributed to developer documentation for Microsoft Office
VBA Language References, Microsoft Office Primary Interop Assemblies,
Microsoft Office Web Services Toolkits, and other Office development
technologies. Paul has worked as a web site editor and frequent web
columnist for the Office Developer Center on the Microsoft Developer
Network (MSDN). Paul is currently the Documentation Manager for Microsoft Visual Studio
Tools for the Microsoft Office System and the Microsoft Visual Studio core integrated development environment (IDE). Paul lives in the mountains of Washington with his wife and
two daughters.

xiii

About the Technical Reviewer
■ANDY POPE is a computer programmer living in Essex, England. He has been awarded the title
Excel MVP by Microsoft each year since 2004. As well as being an active member of several
web-based Excel forums and newsgroups, Andy maintains a web site focusing on Excel
charting, at http://www.andypope.info.
Andy’s active involvement within the online Excel community would not be possible
without the support and understanding of his partner Jackie and especially their two children, Hannah and Joshua.

xv

Acknowledgments
I

want to give my deepest thanks to my wife, Shelley, for her constant love, encouragement,
support, and counsel as I wrote this book. Without her, there’s no way I could have put this
book into your hands.
I also want to thank my two extra-special daughters for giving up a lot of their playtime
with me while I worked on this book.
Thanks also to the staff at Apress for the opportunity to write this book, including:
Gary Cornell, Apress Founder; Dominic Shakeshaft, Editorial Director; Jim Sumser, Lead Editor; Beth Christmas, Project Manager; Marilyn Smith, Copy Editor; and Andy Pope, Technical
Reviewer. Also thanks to Kari Brooks-Copony, Beckie Stones, and Tina Nielsen at Apress for
their help.
I want to thank my parents, Paul and Darlean, for their continued support and
encouragement.
Finally, I want to thank God for helping me acquire the knowledge and skills I needed
in order to write this book.

xvii

Introduction
C

onsider the following two story problems:
If I ride a bicycle 5 miles in 20 minutes, how long would it take me at that speed to ride
my bicycle 20 miles? At that speed, how far could I ride my bicycle in 45 minutes?
If I earn $25.00 per non-overtime hour at a job and I work 45 hours per week, how many
weeks would I need to work to earn $30,000 before taxes? How much would I earn before taxes
if I worked a 50-week work year and took the remaining two weeks off without pay?
Here are the answers to these story problems:
It would take me 80 minutes to ride my bicycle 20 miles if I were riding it 5 miles in
20 minutes (that is, 15 miles per hour). At that speed, in 45 minutes I would ride my bicycle
11.25 miles.
I would need to work between 25 and 26 weeks to earn $30,000 if I earn $25.00 per hour
working 45 hours per week (assuming I am paid one-and-one-half times my hourly rate for
all hours worked over 40 per week). At that pace, I would earn $59,375 if I worked 50 weeks
that year and took the remaining two weeks off without pay.
These are a few simple examples of the types of problems that the Microsoft Office Excel
what-if data analysis tools are designed to solve quickly. This book teaches you how to use
these tools.
In short, what-if analysis is the process of changing the values in certain worksheet cells
to see how those changes affect other worksheet cells. For example, you could try varying
interest rates for a home mortgage to determine the mortgage payment that you could afford
to pay over a 15-year or 30-year mortgage term.

What Are the Excel What-If Data Analysis Tools?
The Excel what-if analysis tools include the following:
Goal Seek: When you know the desired result of a single formula that you want to achieve,
but you do not know the input value that the formula needs to determine the desired
result, you can use the Excel Goal Seek feature. Excel goal seeks by varying the value in
a single worksheet cell until the formula that depends on that cell displays the desired
result. For example, using the earlier bicycle example, at 15 miles an hour, you can adjust
the number of minutes to 45 to determine how many miles you would travel at that rate
(11.25 miles). In this case, the number of minutes is expressed as a formula (number of
miles multiplied by the result of dividing 60 minutes by the number of miles per hour).
The miles per hour are constant, and Excel is goal seeking to determine the number of
miles traveled.

xix

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■INTRODUCTION

Data tables: A data table is a collection of cells that display how changing certain values
in worksheet formulas affects the result of those applied formulas. Data tables provide a
shortcut for calculating multiple versions in one operation, and a way to view and compare the results of all of the different variations together on your worksheet. Using the
bicycle example again, you could create a table that summarizes the number of miles
traveled at different speeds and different elapsed minutes traveled.
Scenarios: Excel can save a set of values and substitute them automatically in a worksheet
to allow you to forecast the outcome of a worksheet model. You can create and save different scenarios on a worksheet, and then switch to any of these scenarios to view different
results. For the bicycle example, you could switch between two or more different number
of miles traveled using combinations of different speeds and elapsed minutes traveled.
Solver: Using Solver, you can find an optimal value for a formula in a target worksheet
cell. Solver works with a group of cells related to a target cell’s formula. Solver changes
the values of adjustable cells to produce the desired result you specify in the target cell
formula. You can also apply upper, lower, and exact constraints to restrict the values
Solver can choose from to adjust the cells. Using the bicycle example again, you could
determine the least and greatest possible number of miles traveled at a given speed and
distance.
Here’s a summary of when you would use each of these tools:
• Use Goal Seek when you want to find the correct single input value to achieve the
desired single output value.
• Use data tables when you want to display the effect of one or two variables on one or
more formulas in table format.
• Use scenarios when you want to create, change, and save a number of different sets of
values and formulas that each produces different results.
• Use Solver to find the best solution to problems that revolve around the manipulation
of several changing cells, variables, and constraints.

System Requirements and Setup
I could have written this book to make it apply to several versions of Excel. Then I could
point out everywhere in the text that you would need to adapt for a specific Excel edition.
But I thought that approach would be very tedious and confusing to most readers. Therefore, I chose to write this book with Excel 2003 in mind. There are few, if any, differences in
the basic user interface and functionality of the what-if tools included in Excel 2003,
Excel 2002, Excel 2000, and Excel 97.
In Excel, Goal Seek and scenarios are available on the Tools menu by default. Data tables
are available on the Data menu by default. Solver is usually available on the Tools menu. However, if you do not see Solver on the Tools menu, you can add it by clicking Tools ➤ Add-Ins,
selecting the Solver Add-In check box, and clicking OK. Note that Excel may ask you to provide
your original Excel installation media so that it can locate and install Solver.

■INTRODUCTION

After you set up Excel, you can begin working through the Try It exercises provided throughout this book. In all my years both as a communicator and student of technical concepts, I have
become a firm believer of the “read it, see it, do it” approach to learning new information. Since
that is how I communicate technical concepts, I apply the same approach here.
I start each chapter by sharing a very simple, somewhat light-hearted scenario to get you
quickly oriented to each concept. Then I show the concept in a more serious scenario, accompanied by a few notes and tips that you will want to keep in mind as you approach each concept,
along with a small number of screen shots for tougher concepts that deserve a picture to help
you gain context. Then I let you loose to practice what you have learned with the Try It exercises. If you do not want to spend a lot of time setting up the Try It exercises, you can download
them as a series of workbooks from the Source Code area of the Apress web site at http://
www.apress.com.

What You Should Already Know
As you can probably determine by the book’s title, this book is not about teaching you how to
use everything in Excel. I assume you already know how to use the basic features of Excel, such
as workbooks, worksheets, cells, formulas, menus, and toolbars.
For more information about how to use Excel, see Excel online help (in Excel, click Excel ➤
Microsoft Office Excel Help, or type a question in the Excel Type a Question for Help box, and
then press Enter). You can also see Excel online help by visiting the Microsoft Office Online
web site at http://office.microsoft.com, clicking Assistance, and then clicking Excel 2003.
As with all Internet addresses, there will undoubtedly come a time when the addresses’
hosts will change their locations. If you notice a broken Internet address in this book, or any
other technical glitch for that matter, please notify us at http://www.apress.com. Simply type
this book’s title in the Search box and click Go. Then click the Submit Errata link.

Getting Started Quicker
Some readers will want to go through this book cover to cover. However, if you want to get
started quicker, you can turn to the appendices toward the back of this book. These contain
very concise, summarized information, as follows:
• Appendix A, “Excel What-If Tools Quick Start,” is a quick way for you to get started after
reading just a few pages. While this appendix does not provide in-depth coverage of
each what-if feature, it is especially helpful if you need a quick refresher or you get stuck
and do not want to reread through an entire book chapter.
• Appendix B, “Summary of Other Helpful Excel Data Analysis Tools,” gives you a quick
overview of other Excel data analysis tools, such as filtering, sorting, analyzing online
analytical processing (OLAP) data, conditional formatting, subtotals, outlining, consolidation, PivotTables, and PivotCharts.
• Appendix C, “Summary of Common Excel Data Analysis Functions,” provides a short
list of common functions for statistical, mathematical, and financial formulas.
• Appendix D, “Additional Excel Data Analysis Resources,” provides several book titles
and Internet addresses for further research on various Excel data analysis topics.

xxi

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■INTRODUCTION

■Note To read Excel 2003 online help topics about Goal Seek, data tables, scenarios, and Solver, click
Help ➤ Microsoft Excel Help ➤ Table of Contents. Expand Working with Data, then Analyzing Data, then
Performing What-If Analysis On Worksheet Data.

After you learn some of the basics from these appendices, you can go to the corresponding chapter in this book to learn more.

CHAPTER

1

■■■

Goal Seek
G

oal Seek is a simple, easy-to-use, timesaving tool that enables you to calculate a formula’s
input value when you want to work backwards from the formula’s answer. In this chapter, you
will learn more about what Goal Seek is, when you would use Goal Seek, and how to use the
Goal Seek dialog box. Then you will work through three Try It exercises to practice goal seeking
on your own. The final section in this chapter explains how to troubleshoot common Goal Seek
errors.

What Is Goal Seeking?
Goal seeking is the act of finding a specific value for a single worksheet cell by adjusting the
value of one other worksheet cell. When you goal seek, Excel adjusts the value in a single worksheet cell that you specify until a formula that is dependent on that worksheet cell returns the
result that you want.
For example, say you have two worksheet cells, as shown in Figure 1-1. Cell A1 contains
a number referring to a given distance in miles. Cell A2 contains the miles-to-kilometers conversion formula =CONVERT(A1*5280, "ft", "m")/1000. If you enter 10 in cell A1, Excel returns
the value of approximately 16.1 in cell A2. But how many miles is 20 kilometers? While you
could type one value after another in cell A1 in a trial-and-error fashion (10, 11, 12, 12.5, and
so on), until cell A2 displays 20, it’s much quicker and more accurate to goal seek. (By the way,
the answer is that 20 kilometers is equivalent to about 12.4 miles.)

Figure 1-1. Goal seeking for converting miles to kilometers

When Would I Use Goal Seek?
As you can determine from the previous miles-to-kilometers conversion example, you use the
Goal Seek feature when you know the desired result of a single formula, but you do not know
the input value the formula needs to determine the result.
You should consider goal seeking when you have a single worksheet cell with a value and
another single worksheet cell with a formula that depends on the cell that contains the value,
1

2

CHAPTER 1 ■ GOAL SEEK

and you want to get to a specific value in the worksheet cell with the formula by adjusting the
worksheet cell with the value. For example, say you have two worksheet cells representing a
grocery item sales price and the sales price plus 8.8% sales tax. Cell A1 contains the value 5.95,
and cell A2 contains the formula =ROUND((A1+(A1*8.8%)), 2), as shown in Figure 1-2. Now you
want to know what the grocery item sales price would be if the sales price plus tax were $10.99.
Using the Goal Seek feature, you can quickly discover the answer: $10.10.

Figure 1-2. Goal seeking for a grocery item sales price plus tax
As another example, say you have the three worksheet cells shown in Figure 1-3. Cell A1
contains a number referring to a given distance in feet. Cell A2 contains the feet-to-yards conversion formula =CONVERT(A1, "ft", "yd"). Cell A3 contains the yards-to-miles conversion
formula =CONVERT(A2, "yd," "mi"). You could goal seek to find out how many feet there are
in 1.5 miles (7,920 feet), and you could also goal seek to find out how many miles there are in
3,225 yards (1.83 miles).

Figure 1-3. Goal seeking for converting feet to yards to miles

How Do I Use Goal Seek?
To goal seek in Excel, click Tools ➤ Goal Seek, complete the requested information in the Goal
Seek dialog box, and then click OK. The results will appear in the Goal Seek Status dialog box.
The Goal Seek dialog box is simple to use. It consists of three controls: the Set Cell box, the
To Value box, and the By Changing Cell box, as shown in Figure 1-4.

Figure 1-4. The Goal Seek dialog box

CHAPTER 1 ■ GOAL SEEK

Here’s the general procedure for using the Goal Seek dialog box:
1. In the Set Cell box, type or click the reference for the single worksheet cell that
contains the formula that you want to set to a desired value.
2. In the To Value box, type the value that you want the cell referred to in the Set Cell
box to display.
3. In the By Changing Cell box, type or click the reference for the single worksheet cell
that contains the value that you want to adjust. This cell must be referenced by the
formula in the cell you specified in the Set Cell box.
After you type or select values for these three boxes, click OK to run Goal Seek. The Goal
Seek Status dialog box will appear, reporting whether Excel was able to find a solution. It will
also display the target value sought in the To Value box and the current value of the cell in the
By Changing Cell box, which may not necessarily match the target value. If Excel does find
a solution, the target value and the current value will be equivalent.
For example, say you have two worksheet cells: Cell A1 contains a temperature value in
degrees Fahrenheit, and cell A2 contains the Fahrenheit-to-Celsius temperature conversion
formula =CONVERT(A1, "F", "C"), as shown in Figure 1-5. Typing 100 in cell A1 returns the
Celsius temperature of approximately 37.8 degrees in cell A2. But how many degrees Fahrenheit is a Celsius temperature of 20 degrees?

Figure 1-5. Goal seeking for converting Fahrenheit temperatures to Celsius

Here’s how to figure out the answer:
1. Click Tools ➤ Goal Seek.
2. In the Set Value box, type or click cell A2.
3. In the To Value box, type 20.
4. In the By Changing Cell box, type or click cell A1.
5. Click OK, and click OK again.
The Goal Seek Status dialog box displays the target value, 20, and Excel inserts the answer,
68, into cell A1.
Now that you know how the Goal Seek feature works, practice using it in the following
Try It exercises.

59cf4c9f76dd75c1cc678ccf0261fa69

3

4

CHAPTER 1 ■ GOAL SEEK

Try It: Use Goal Seek to Solve Simple
Math Problems
In this exercise, you will use Goal Seek to solve three sets of simple math problems:
• Calculating speed, time, and distance
• Determining circle radius, diameter, circumference, and area
• Using an algebraic equation
These exercises are available in the Excel workbook named Goal Seek Try It Exercises.xls,
which is available for download from the Source Code area of the Apress web site (http://
www.apress.com). This exercise’s math problems are on the workbook’s Math Problems worksheet.

Speed, Time, and Distance Math Problems
For your first set of math problems, look at the Math Problem 1 section near the top of the
worksheet, as shown in Figure 1-6.

Figure 1-6. Goal seeking for the speed, time, and distance math problems

You will goal seek for speed in column A, for time in column D, and for distance in
column G. But first, let’s review the formulas for these three math problems:
• Speed is calculated in cell A4 as kilometers traveled multiplied by the result of dividing
60 minutes per hour by the number of minutes, or the formula =A6*(60/A5).
• Time is calculated in cell D5 as kilometers multiplied by the result of dividing 60 minutes
per hour by the number of kilometers traveled per hour, or the formula =D6*(60/D4).
• Distance is calculated in cell G6 by the number of kilometers traveled multiplied by the
number of minutes traveled divided by 60 minutes per hour, or the formula =G4*(G5/60).

Goal Seeking for Speed
For the speed problem, goal seek to determine how many kilometers you would go if you traveled 75 kilometers per hour in 12 minutes.
1. In cell A5, type 12.
2. Click Tools ➤ Goal Seek.
3. In the Set Cell box, type or click cell A4.

CHAPTER 1 ■ GOAL SEEK

4. In the To Value box, type 75.
5. In the By Changing Cell box, type or click cell A6.
6. Click OK, and click OK again.
Answer: You would go 15 kilometers if you traveled 75 kilometers per hour in 12 minutes.

Goal Seeking for Time
For the time problem, goal seek to determine how fast you would go if you traveled 12 kilometers in 8 minutes.
1. In cell D6, type 12.
2. Click Tools ➤ Goal Seek.
3. In the Set Cell box, type or click cell D5.
4. In the To Value box, type 8.
5. In the By Changing Cell box, type or click cell D4.
6. Click OK, and click OK again.
Answer: You would go about 90 kilometers per hour if you traveled 12 kilometers in
8 minutes.

Goal Seeking for Distance
For the distance problem, goal seek to determine how many minutes it would take if you were
traveling 85 kilometers at 72 kilometers per hour.
1. In cell G4, type 72.
2. Click Tools ➤ Goal Seek.
3. In the Set Cell box, type or click cell G6.
4. In the To Value box, type 85.
5. In the By Changing Cell box, type or click cell G5.
6. Click OK, and click OK again.
Answer: It would take about 71 minutes if you were traveling 85 kilometers at 72 kilometers per hour.

Circle Radius, Diameter, Circumference, and Area
Math Problems
For your second set of math problems, look at the Math Problem 2 section midway down the
worksheet, as shown in Figure 1-7.

5

6

CHAPTER 1 ■ GOAL SEEK

Figure 1-7. Goal seeking for the circle radius, diameter, circumference, and area math problem

You will goal seek for a circle’s diameter, circumference, and area. But first, let’s review the
formulas for these three math problems:
• Diameter is calculated in cell A11 as twice the radius, or =A10*2.
• Circumference is calculated in cell A12 as the number pi multiplied by the diameter,
or =PI()*A11.
• Area is calculated in cell A13 as the number pi multiplied by the square of the radius,
or =PI()*POWER(A10, 2).
For these math problems, the units of measurement are unimportant. They could be
inches, centimeters, or whatever.

Goal Seeking for the Diameter
For the diameter problem, goal seek to determine the radius when the diameter is 6.25.
1. Click Tools ➤ Goal Seek.
2. In the Set Cell box, type or click cell A11.
3. In the To Value box, type 6.25.
4. In the By Changing Cell box, type or click cell A10.
5. Click OK, and click OK again.
Answer: A diameter of 6.25 results in a radius of 3.125.

Goal Seeking for the Circumference
For the circumference problem, goal seek to determine the radius when the circumference is 30.
1. Click Tools ➤ Goal Seek.
2. In the Set Cell box, type or click cell A12.
3. In the To Value box, type 30.
4. In the By Changing Cell box, type or click cell A10.
5. Click OK, and click OK again.
Answer: A circumference of 30 results in a radius of about 4.8.

CHAPTER 1 ■ GOAL SEEK

Goal Seeking for the Area
For the area problem, goal seek to determine the radius when the area is 17.
1. Click Tools ➤ Goal Seek.
2. In the Set Cell box, type or click cell A13.
3. In the To Value box, type 17.
4. In the By Changing Cell box, type or click cell A10.
5. Click OK, and click OK again.
Answer: An area of 17 results in a radius of about 2.3.

Algebraic Equation Math Problem
For the algebraic equation math problem, look at the Math Problem 3 section toward the
bottom of the worksheet, as shown in Figure 1-8.

Figure 1-8. Goal seeking for the algebraic equation math problem
You will goal seek for several variables to produce a desired answer. But first, let’s review
how this equation works.
Take the algebra expression ax + by + cz = d. In this expression, you can substitute all of
the values a, b, c, d, x, y, and z, except for one value. Given six of the values, you can determine
the seventh value.

Goal Seeking for the Variable C
For the following values:
• a=1
• b=2
• d = 12
• x=1
• y=2
• z=1
determine the value of c.

7

8

CHAPTER 1 ■ GOAL SEEK

1. Type the following values in the following cells:
A17: 1
A18: 2
C17: 1
C18: 2
C19: 1
2. Click Tools ➤ Goal Seek.
3. In the Set Cell box, type or click cell A20.
4. In the To Value box, type 12.
5. In the By Changing Cell box, type or click cell A19.
6. Click OK, and click OK again.
Answer: If a = 1, b = 2, d = 12, x = 1, y = 2, and z = 1, then c = 7.

Goal Seeking for the Variable Z
For the following values:
• a=2
• b=4
• c=3
• d = 65
• x=5
• y=7
determine the value for z.
1. Type the following values in the following cells:
A17: 2
A18: 4
A19: 3
C17: 5
C18: 7
2. Click Tools ➤ Goal Seek.
3. In the Set Cell box, type or click cell A20.
4. In the To Value box, type 65.

CHAPTER 1 ■ GOAL SEEK

5. In the By Changing Cell box, type or click cell C19.
6. Click OK, and click OK again.
Answer: If a = 2, b = 4, c = 3, d = 65, x = 5, and y = 7, then z = 9.

Goal Seeking for the Variable A
For the following values:
• b=6
• c=2
• d = 84
• x=4
• y=2
• z=9
determine the value of a.
1. Type the following values in the following cells:
A18: 6
A19: 2
C17: 4
C18: 2
C19: 9
2. Click Tools ➤ Goal Seek.
3. In the Set Cell box, type or click cell A20.
4. In the To Value box, type 84.
5. In the By Changing Cell box, type or click cell A17.
6. Click OK, and click OK again.
Answer: If b = 6, c = 2, d = 84, x = 4, y = 2, and z = 9, then a = 13.5.
Now that you know how to goal seek with math problems, try goal seeking to forecast
interest rates.

Try It: Use Goal Seek to Forecast Interest Rates
In this exercise, you will use Goal Seek to calculate interest rates for a home mortgage, a car
loan, and a savings account. These exercises are available on the Goal Seek Try It Exercises.xls
file’s Interest Rates worksheet.

9

10

CHAPTER 1 ■ GOAL SEEK

Home Mortgage Interest Rate
For your first set of interest rate calculations, look at the Interest Rate 1 section near the top of
the worksheet, as shown in Figure 1-9.

Figure 1-9. Goal seeking for a home mortgage interest rate
Given a loan amount, a loan term in months, and an interest rate, cell B6 displays the
monthly mortgage payment using the function =PMT(Rate, Nper, Pv). In this function, Rate
is the interest rate (cell B5 divided by 12), Nper is the total number of payment periods
(cell B4), and Pv is the loan’s present value (cell B3).

Goal Seeking for the Mortgage Amount
Determine what the loan amount would be given a 15-year term, a 5.75% interest rate, and
a $1,100 monthly payment.
1. In cell B4, type 180 (which is 15 years multiplied by 12 months per year). In cell B5,
type 5.75%.
2. Click Tools ➤ Goal Seek.
3. In the Set Cell box, type or click cell B6.
4. In the To Value box, type -1100.

■Note You use a negative value in the To Value box of the Goal Seek dialog box (which appears on the
worksheet as a red number in parentheses) to indicate an outgoing loan payment.

5. In the By Changing Cell box, type or click cell B3.
6. Click OK, and click OK again.
Answer: The loan amount for a 15-year term, a 5.75% interest rate, and a $1,100 monthly
payment is $132,465.

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